tv Power Lunch CNBC May 1, 2015 1:00pm-3:01pm EDT
buying aer. an airline leasing company. because because of unusual activity. >> china is buying chicken, not copper. >> marathon petroleum. >> have a great weekend. great sports saturday as well. we will see you on the other side. power starts now. >> we call this the drury matheson perk walk. april ending with a wimper but may beginning with a bit of a bang. the dow up triple-digits. sell in may and go away? it's more complicated than that. how you need to position yourself for the month ahead. >> powering the future. unveiling new batteries designed for homes and businesses. who will be the winners and the losers? >> shares of linked in tanking after warnings about the outlook. just the latest social media stock to get creamed in social media. the bubble beginning to burst.
jack and susie welsh will weigh in on that. >> okay as we were talking about, sell in may and go. that's the question. >> the d ourks w calling into question the old cliche which we discussed so much yesterday. now with us from the floor of the nyse. >> it's a new month and we are seeing a reversal of trends. a few got people obviously betting that this will be a better month. let me show you high volume starting off the month of april. this is one of the big etfs out there. you own the small cap and mid-cap. that's a lot of home builders and airlines. big volume and somebody is putting money to work. more stable today. look what's leading the way. what had a disappointing difficult month? in april health care. one had a good month. energy.
what's lagging? energy. you buy the losers and is the will winners. you try to make it all over again. >> southwest, jet blue, united and american. they had an awful april. they are on the upside. retailers had a terrible week overall. kohl's and big lots. buckle had a horrible time. home depot was down 6% at the close for the week. it's up about 2% right now. the point here tyler and mandy, new month, new trends trying to be established. >> we will talk about what they could be in just a second. it is up for the 23i6r9 time in a week now. down more than 2% in that time
frame. is following the big move at the nasdaq for us. >> good day for the nasdaq and good start to the month. up by more than a half%. more than 2% for the week. watching them and gilliad science up by 5.5%. led by $4.5 billion in sales between the two hepatitis c drugs. we are watching apple for you. down for 3% for the week. great earnings and troubles with the apple watch and defect later in the week. bringing the stock down and tesla, we are talking about the tesla energy announcement. the stock getting hit down 2% for the day. one of the biggest losers in the nasdaq 100. tyler, back over to you. >> thank you very much kate. sell in may and go away? stocks rebounding from yesterday's losses.
joining us steve woods. the managing director at c lane and associates. great to have you. april was an international month. the dollar had their first decline and you had crude oil that had their best month finally. what do you think the trend will look like for may? >> i think it will continue to shop a lot. it will be the constant travel companion throughout the year. not only a ten-year space and europe the 10-year german bond went from .07% to .36 in a hand full of trading days. that's a significant move. what the europeans are doing and what the u.s. is doing with monetary policy. also i think that has the dollar
weakens a little bit, and that will give us a different picture and a back end loaded picture. >> that's what you are looking at, steve. what trends can we discern for the month that we can trade on? >> i would add the volatility of oil. the effect of that on retails was the opposite. certain sectors and interest rates has been so interrelated in terms of trading, you can play the other side. i agree with steve and think the oil prices will eventually come out of the system and we will see if we see the stability, that will provide some tail wind to industrials, but to consumers and i think that's going to affect the stock market and at the end of the year give us a positive push. >> do you think we are due for
pull back? >> i do. everybody is talking about it. it has been three years since we had a 10% correction. too many macro head winds and the market looks tired and stocks have actually been up to 2100. there will be a factor whether it's interest rates and oil. i do think time in his heart to do, but if you have time to do it retail industrials and going back to energy. >> timing is always hard to do. we could retire if we could perfectly time the market. do you think a pull back could be a good thing. >> it's something that would be expected. the headline i think is the lack of volatility and a lack of pull back in the markets. you need to take a global perspective as well. equities and fixed income. also when we look at the united states valuations have not been your friend for a while. the markets tend to chop up but from that perspective, they are tough in the u.s. we would look
at europe as something we upgraded and looked attractive. japan has been an upgrade as well. global fixed income and opportunities, but it's an active management environment. security collect will be beneficial than it has been. we need to go from the broad sector-wide moves into active management and balance sheet by balance sheet and income statement by income statement. >> enjoy your weekend and go to power lunch.cnbc.com to see what else they are betting on. tyler? >> we have the news alert in the oil sector for us. >> good afternoon. baker hughes is out with the u.s. oil rig count for last week. we were down 24 rigs oil rigs to 679. remember the week before we declined 31 oil rigs. we were seeing the rate of decline slow a little bit. we were down 848 rigs versus a year ago.
keep in mind we are down more than 50% versus a year ago and traders think that is a good sign, but what they are looking for is a change in actual production numbers. we did see two weeks of declines in u.s. production but shot back up last week. on wednesday when the eia comes out, they will want to see a decline. to see the rigs coming off line and having an impact on the numbers. crude was trading at 58 and change when the report came out and not changed that much at this point. about a 2% drop on the day. what traders are telling me they keep in mind they look at the data points together, but need to see the hard evidence. this is supportive of prices but we had a pop yesterday. i'm not surprised to see the selling action today. back to you. >> thank you very much jackie. buffett groupies and investors gearing up for a big weekend in omaha, nebraska. that's where our becky quick is right now. hi beck. >> hey, tyler.
i am on the floor of the convention center where 40,000 of the berkshire faithful of expected to arrive tomorrow. for the first time ever they opened the hall on the hall. shareholders who were coming in. they opened the floor in the last eight or nine minutes. they are coming in to check out a lot of the berkshire companies. if you take a look right here you will see the dairy queen booth on this side of it. if you come back this way, over my other shoulder guess who that is. the geico gecko. all kinds of things you can buy here. oriental trading and see's candy. they can buy the goods from the booths here and not just the berkshire companies, but the companies that berkshire owns major steaks in. you have ibm and coca-cola. the reason that this is a big deal and there more shareholders expected, this is the 50th anniversary since they created this partnership.
as a result you got tomorrow the same thing that you usually have. warren buffett will be taking questions for about 6.5 hours from the shareholders. people are here ahead of that and we have been watching to see what they are doing. they are waiting to hear from warren buffett. we had the chance to catch up a little bit and get a sneak preview. we asked them what's happening with the economy. we had the loudy read for the gdp and the chance to ask him if that means the fed will hold off longer before they raise interest rates. here's what he had to say. i thought it was unlikely partially because of what's going on in europe in terms of negative interest rates. it will be very hard for the fed to bump rates up here with negative rates in europe. i could be wrong, but that has been my view for some months. >> because this is the 50th anniversary, you are seeing more of the big celebrities and leaders in the world of business
than normal. they do have the four ceos of the major investments. ibm, coca-cola and american express. they make up more than 60% of the portfolio. the ceos will be here and we will get the chance to sit down and talk to them about what it's like to have warren buffett. that's something we will be bringing to you on monday and we will be joined live for three hours starting at 6:00 a.m. eastern time. later in the show bill gates and charlie munger will join us live as well. it will be a show full of things to watch for. back over to you. >> doesn't he drink something like five cokes a day? is that right? >> yeah. i think it's five or six a day. he figured out the calorie count on that and allocated that to part of his general allowed consumption of calories. >> very disciplined like everything else in his life. thank you very much. powering the future tesla
. >> intel on report that is it signed a stand still agreement with altera that expires in june. intel has the option of launching a hostile bid for altera. they re jected a bid from intel. federal judge ruling that american express cannot prevent merchants from steering customers towards cards with lower fees than those charged from a.m. ex. a sale of itself and i will sell myself as well after the ceo left in february. the stock is up 13%. e land is trying to change the way we power our homes and systems. who will be the winners and losers in the power storage game? morgan brennan who covers everything will take a look. morgan? >> thanks tyler.
happy friday. this is the thing to keep in mind. they would allow a home with solar panels to collect energy for use at a later date. the big winners could be solar city that they cofound and solar edge. they are both channel partners. energy software company is also a partner. the shares are up today. it's not clear how the news will affect other companies developing renewable energy companies. sun edison and phase energy. also start ups like prime us power and embree are also in this area as well. despite fears of a utility spiral as more plugs on the grid, some including duke energy and edison international are installing battery system of their own grid.
the biggest thing really to watch, everybody has been focusing on the home side of these batteries. it's the commercial application. as big business uses battery storage to bring down costs. in terms of tesla, they are already using batteries in some locations. amazon and target are rolling out programs as well. i will note that one of the biggest losers on the heels of this news is generac. they have been trading lower about 2% to 3% i will be back with you with a different story just as exciting. >> thank you very much. mandy, over to you. >> wearing a totally different cap. a card robe of caps to change into. chevron, the latest to report blowout earnings despite low oil prices. revenue topping analyst expectations. energy overall has been the best performing sector in the month of april, up over 6%. will the rally and the rebound
continue in may or have you missed the boat? cio is energy equity analyst with capital one. have people missed the the boater are there further gains on the horizon? >> happy to be here. i think a lot of the gains are priced into the stock. obviously we had a great april and a lot of names have run substantially year to date when we checked our i think they can continue to run if oil continues to go higher. i don't think the gains will be what we have seen over the past month or so. >> let's talk about the gains as a follow-up. >> some of resources are up 25%. 48% year to date for petroleum. 43% year to date. would you be selling those now?
>> good point on the gains year to date mandy. i will be sticking with the names because those are companies i believe have the potential to expand the resource base going forward. mainly through adding to the drilling inventory. even though they had good gains year to date i'm looking for them to go higher. >> what about you? you have baker hughes pioneer natural, and og and all have gained here to date. not quite as much as richard's picks. >> you can look at this and see there is a bounce off the bottom or the beginning of a new market. our view is this is the beginning of something. there has been a complete change in the way the energy stocks and the markets themselves have reacted to this big break in oil prices. that change is just beginning to be discounted. demand will be significantly higher than people expected. supply is topping out. you did a report on the rig count. when they collide, prices move
on the upside. if prices will continue to have an upward drift, you will need to look at this as an investment rather than a trade. over the next five years, i can't see a better spot in the economy in terms of making returns than to look at the shale-based investments; og and pioneer are the quality names that have years of inventory and even at $65, these are successful growing businesses. i would argue unlike somebody who is looking at one month's move, look at this as a two to three-year trade and really get into these quality names. this is going to be a great opportunity. >> you see further energy stock gains ahead. thank you very much for joining us. let's take a look at what's happening with the economy with a wrap it up day. steve leesman, be as rapid as
you can. >> a really interesting develop. the wrap it update and the tracking is unchanged and it's the weakening second quarter i want to focus on. here's the wrap it update. 0 to 0.3% is the call with the tracking. the forecast obviously is not tracking because we have no data. it has been coming down and it's now 3-4. i want to show you the range. who is where? hfe at 4% while morgan stanley down at 1.6. this is important. if we don't get the second quarter bounce back that will push ahead. some of the commentary that came with it the manufacturing sector continuing to struggle off the number today. plummeting oil and gas drilling. watch what joy did. now at zero for the first quarter. here's what he said. the large building will likely dampen the output in q2. mandy, a lousy q1. that's in the bag.
the focus on q2 and while the median is high a very wide range and we are watching whether or not they have that bounce back that people expect or if the weakness continues. >> thank you very much steve. >> thanks very much. aggressive rules for the railroads. morgan brennan is back with the details. >> aggressive is a good word for this. the dot after two years in the making. we had them unveil sweeping guidelines for how cars will be build to transport crude by rail. no on wonder. we had more than two dozen crude trains derail. these are rules that have been a long time in the making. we will outline them and what you need to know as an investor when power lunch returns. blap
following rail accidents with the u.s. oil, tough new rules to make oil shipments by train safer. back with the details. morgan? >> we got the federal government's rules for updated cars and as well as other flammable substances. they unveiled the details this morning alongside the canadian counter part transport canada. just to put it in context it has been two years after the train explosion in quebec that killed 47 people and nine months after regulators proposed rules last july. there has been a lot leading up to this.
including four this year. here's what the tank car of the future will entail as these rules go into effect come aukd. older cars have to be phased off the tracks in three years. newer cars must be retro fitted within five years. new cars will have sticker steal walls and tougher valves and more protection at the ends of the tank. the biggest change is going to be that large oil trains will have to install a newer faster braking system that will go into effect 2o 21. that's going to be very expensive. it's also for the railroad and petroleum industries that have all reiterated their disappointment specifically about these brakes. in terms of investor reaction, take a look the the manufacturer stocks. you have greenbrier trinity, american rail car. they are all up today. they will be a benefactor for the brake braking systems.
it has been long a waded. they are happy to have clarity here. >> let's get a check on the bond market. we don't have rick today. i will try to fill the extremely big shoes. they had a poor april and you can see that the u.s. treasury market seems to be resuming the recent decline on the first day of may. the ten-year yield hitting a seven-week high. 2.12% for ten-year. a bunch of data this morning like that is moving higher. linked in shares are tanking after a warning about the outlook. just the latest example of social media falling out of favor with investors. is the bubble bursting? icons of business will be joining us with their take in a
second. we will get their take on the health of corporate earnings and the economy. plus, are you trying to buy a home and just keep on getting shutout? stick around. we have six smart ways to win a bidding war. stick with us. stick with us. well, sir. after some serious consideration i'd like to put in my 15-year notice. you're quitting!? technically retiring, sir. with a little help from my state farm agent i plan to retire in 15 years. wow! you're totally blindsiding me here. who's gonna manage your accounts? this is a devastating blow i was not prepared for. well, i'm gonna finish packing my things. 15 years will really sneak up on you. jennifer with do your exit interview and adam made you a cake. red velvet. oh, thank you. i made this. take charge of your retirement. talk to a state farm agent today. your mom's got your back. your friends have your back. your dog's definitely got your back. but who's got your back when you need legal help? we do. we're legalzoom, and over the last 10 years, we've helped
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>> hello, everyone. here's your cnbc news update for this hour. president obama said justice needs to be served in the death of freddie gray. this following dimes against six baltimore police officers in the death of the 25-year-old suspect while in police custody in april. gray's death has been ruled a homicide. an investigation is determining his arrest was illegal and his treatment in custody amounted to murder and manslaughter. criminal charges filed in the george washington bridge scandal. new jersey governor chris christie's former chief of staff bridget ann kelly charged with nine criminal counts. the former port official pleaded will goy for his in ordering the lane closures that caused days of traffic issues.
it was learned those closures were retaliation against the mayor of ft. lee new jersey for not endorsing christie's campaign. >> the opening of the milan expo. police fired at demonstrators angry over economic decline. it's a six-month long show piece of culture and technology open to the public. thousands of police responded to diffuse the crowd. sad news here. ben e. king has died. the r&b singer was best known for the song stand by me. the song topped the charts in 1961 and again in 1986 following the use in the film with the same name. he was 76 and leaves behind his wife of 50 years. now back to power lunch. mandy, back to you. >> lo ofly song it was too. thank you very much. gold prices are closing hitting six-week lows. let's look at the numbers for you. it is coming up any second now.
there we go. 1174 right now for ounce, down by about $8. silver and copper and the other metals all moving down except for copper. # it is sitting right now at the highest since december on expectations of further stimulus measures from china which by the way is the top consumer of copper. tyler, over to you. >> may getting off to a rocking start as you will see on the numbers. the dow industrials are up about 123, easy as one, two, three. the nasdaq up 36. bob pisani is following the business at the new york stock exchange. >> narrow trading range and a big start the month. the s&p and a 6 to seven-point trading range. the only problem i have is we have europe and raisia close and we don't have overseas feedback. i like to see that.
it gives you a better sense of where the market is. i am hesitant about saying we have a good up trend in the market right now. what was weaker in april is stronger. buy losers and sell winners. health care had a tougher time in april. energy was the market leader in april. that's the one having a tough time. you can see what the traders tried to do here. it's simple. buy low and sell high. transpours, just awful april. airlines were terrible as well. guess what's a market leader today. doesn't it like it when you buy low and sell high? how do you figure out what a company is valued when you have earnings like this. the hope is this is the trough in earnings for the big oil dump companies. they made $11. they can. it's between 100 and $115.
the o.j. thing that saved them is the refining. that saved them. hopefully this will be the bottom for earnings and prices will stabilize and go up and costs will come down from here. that's the hope. thank you very much, bob pisani. hot players in the social media space have cooled down. is there a bubble at work in silicon valley and is it getting ready to pop? here's julia boorstin with more. hi, there, julia. >> we are seeing a fall from grace of three companies as investors wonder whether they can keep up growth. linked in shares plummeting more than 20% today. this company's worst day ever as a public company on weak guidance for the and the rest of the year. yesterday yelp tanked on to disappointing guidance and
twitter spiralled down after the warning that the ad products won't generate revenue as quickly as hoped. facebook draws none of these concerns with 1.44 billion yuzers and the portfolio of apps are growing. it improving results with products like video ads. facebook shares are down over the past week and a half since the company reported results that were impacted by foreign exchange rates. industry watchers are talking about the top of the market and having that conversation on twitter. they are pointing to the three stocks declines and tweeting is this the start of a market correction? an lytics expert said twitter imploded and linkedin got fired. they will stop funding for every social app now. the three struggling companies have their own issues and they chaired the challenge of growing advertising as they tryout new
formats. tyler, over to you. >> thank you very much. thoughts on social media and more from business visionaries jack and susie welsh who has been crisscrossing the country with the real life mba. your no bs guide to winning the game and build a team and growing your career. great as always to see you and together you get by 1 and get another for free. let's talk a little bit first about what you guys see in the social media world. it has been a rough week for three of the big stocks linked in twitter and yelp. i look at what kids do. 15s to 20s and i see them moving away from twitter and towards other apps. is that what you see? park are we have been able to do an experiment because as we face business schools and older people and all different types of groups on the road we say as we are relieving the stage, we are talking about this.
you will get feedback on social media. i went to twitter and think there was nothing on twitter. we were saying where are they talking. we found out that's what's app and group me. for older crowds twitter is really active. if i was twitter, i would be worried about the fact that business school students are not talking about me. that's the next generation of conversation. >> of all the lists, which do you think have legs? >> which have staying power? >> linked in created a need people didn't know they had. now it is filling it. we see that as a very good long-term solid business that will last.
>> as for our school. >> it's probably over. i started to use twitter more. it's one of the rules. let me turn to a subject they know you must have thoughts on. i would love to hear your thoughts about the transformation of ge and how it is changing and what your successor has done and continues to do there. how is it going, do you think? >> i generally take the position of this is now, that was then when i talk about ge. i have been asked this question a lot. the rules and made recurrence in the wholesale that adds business and made it a lot tougher. ge has these regulations that
are very, very good and leverages reduced. it's the imaginal dow jones. it will be here with the dow jones. it will move when e when the world changes. from mid-size to the biggest of the big. they talk about regulations. in general, the companies that change are good. ge change and needed to make changes. every person in business that is in our business is saying change is good. change before you have to. here's a case of them doing that.
>> we have a great 30 year in financial services and now they have financial services tied to their equipment. it phis nicely and we will move on to other businesses. >> susie, you have both been touring the country, crisscrossing as you say to various bookstores and college campuses and talking to people from all walks of life. obviously there is a lot of question marks about the economy. steve liesman gave us a wrap up of the numbers they are looking at in the way they came down. what are you hearing from people across the country about how they feel about the economy? >> you hear from students fear and loathing. 1.8 million kids are graduating this spring. they are scared because they know the economy is not absorbing them. they are ending up in jobs not
in your area. what you feel from the young cohort is a lot of concern that they are not going to have jobs with growth. >> we have a lot of talk. ben bernanke and journal on interest rates and financial moves by the fed. there was not enough talk about regulation. everywhere we have gone, to a small jewelry store trying to be going to the headquarters and the rates and such. it's not just obamacare, but touching every small business in the country. it is the one common theme as we
go from place to place. we have talked to thousands of people across the midwest and that's a killer. you have to talk about regulation and what it's doing. now, we have swung the pendulum over here and we have to get back to the middle. >> we hear the same sorts of things. i want to ask what may be a personal question. you guys fell in love and got married and now you are not only a married couple but a business couple. you do business together. you are a partnership there. a lot of people, husbands and wives think about going into business together. i have with my wife. what makes it work for and you some say that's the last thing i would ever want to do. >> for you, right. >> it clearly works. why does it work? what do you have to do to make it work? >> we really like each other. i think when you are on the road, we are approached by couples who work together and we
are like part of a club. we can't imagine a different life. you know in your gut if you could work full time with your spouse. if you can be together 24-7. for us it works. >> and it's really 24-7 the last four weeks. we have every minute of every day in every campus etc. and we love it. >> it's all good. >> that's the best advice i have gotten. if you like your spouse and want to spend every minute with them go ahead into business with them. great to see you. >> thanks so much. >> it is called the real life mba, the no bs guide. when you hear from them there is no bs there. winning the game and building a team and growing your team. >> inspirational couple. losing a bidding war is frustrating on ebay but crushing if you are trying to buy the house of your dreams. we have tips to help you win the day; diana. >> hi, mandy.
>> it's spring and that's the busiest time for home sales. more homes for sale and more interested buyers. some parts of the market are still struggling and others are red hot. now to tell us how we win a bidding war. diana? >> very tight fly in housing markets across the nation as you said is leading to bidding wars in neighborhoods like this one. 1/3 of all property was at or above asking price. how do you emerge the winner a bidding battle? prepare your finances and carry cash. pret preapproved for a loan now. home sellers are leery of loans that may not be set in stone. if you can, bring cash to the table so if the appraisal comes in low, you can cover the difference.
offer fast and strong. be the first offer and don't insult. nothing turns a seller off more than someone under valuing their prized possession. come in at or slightly below asking so they know you are serious. add an escalation clause. this is the amount of money the buyer agrees to increase if there other bids. say the purchase price is $400,000 and you expect it could go as high as $450,000. say you are willing to go as high as 460, but say the seller can only take a winning bid up to a level just above competing offers. get a preinspection. do the inspection before submitting an offer. yes, it will cost you a few hundred, but sellers hate inspection contingencies on a contract. show the love. if you love love love the house, let the seller know it. either directly or through your real estate agent. don't be afraid to write a
letter and send a picture of your kids and be specific. be are smart, not sappy. research the market. look at comparable homes that just sold. visit the local school and have coffee at the local starbucks and chat with the neighbors. then don't let your emotions steal your wallet. whatever house you are looking at it is not the only house you could ever be happy in. >> know when to walk away diana. >> well when you realize that the price is getting too high to the comps, that's why you have to do your homework and make sure you are not paying more than houses around you. if your emotions are getting into this you will overpay. >> thank you very much. great advice. spring buying season. thank you. are they ready to disrupt the solar energy? the ceo of group one.
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look at that. back above 18,000 and session highs with a triple-digit gain of 166 points. the dow, nasdaq and s&p gaining by 1%. here are this hour's power points and not holding up today as stocks are rallying on the first trading day of the month. the first quarter dgp tracking at 0.2% with a range of zero to 3%. the economy is weak due to a strong dollar and a build up in inventories. business visionaries, jack and susie welsh said you have to be careful investing in social media. they may be losing traction with younger users. they did seem to like linked in and said maybe that one has legs. if you missed any of the big stories in the past hour you can visit at power lunch.cnbc.com. >> straight ahead, getting out of the rat race --
>> digging into social solar. two hedge fund managers making bets and $2.3 million boxing shorts. insane money in this may whether paquiao fight. first back over to tyler and mandy. >> sign me up for a pair of those shorts. we look forward to it. a trader wendy loved the rush but hated being stuck in an office. she longed to do something more artistic, but could she make a career out of it? >> i thought maybe this can be an out let for the creativity on the side but i will never make the kind of money i make on wall street.
>> i used to be a trader. i actually loved the adrenaline and the energy. >> i thought of her as a business person and a typical trader. i am mike and i'm a trader on wall street. >> when i left my hedge fund to study in oxford i starred to get interested in architecture and design. >> when she said i wanted to be a designer it was a good fit. i'm wendy's husband. >> it was something i was interested in but didn't know if i was good at it. >> i never heard the words design or architecture come out of wendy's mouth before she started doing this. >> the first thing i did before keeping my job was to sign up up for interior design classes. i had planned and saved. effectually i said let me take a
year and once i started to get a reputation and get larger more impressive projects with bigger budgets, i thought this really could be a business. >> full force ahead. >> my first high profile client was a movie director. that sort of snowballs and everything has been word of mouth. >> i realize she will be successful once i saw the feedback from her client. how happy they were and how much they loved her for how much she has done to their homes. >> i started to be interested in technology. >> they can roll their whole house. i'm jen jones. we will have automated shades and where we will be controlling the lighting. >> my business is where i want it right now. the experience i had as a traitor helped me tremendously. it feels nice now. i'm enjoying it.
>> now to kourtd me in reagan with a market flash. >> the transportation sector at a second high. up about 1.6% and down 4.5%. showing signs of a longer term recovery approaching the 200 moving average. that is being led by airline stocks that have been boosted by the recent recovery. the biggest amount of momentum right now. jet blue, alaska air, southwest and united continental. >> nice gains across the board. courtney reagan and that is it for me for the first hour. per are melissa lee will join me for the second hour of power. great to be with you. >> see you shortly. 2:00 on wall street. lunchtime in san diego and you are watching the second hour of power lunch. sulley is off today and tyler will be here in a moment.
only two hours left in the trading week. pretty much across the board and we are sitting closer at session highs. quite a different picture. a big bounce in technology. in biotech, we will get to that in a second. at all ten sectors, you only see one in the red. that would be telecon. big gainsas well as health care. social media is getting hit hard, down over 5% on big declines on yelp linked in and twitter. let's bring in the social internet fund. good to have you with us. when you look at the declines do you see value in the carnage. >> twitter has problems with the user growth. linked in got ahead of itself. the link to the media where everybody has a voice is still very early and there is a lot of
room to run in the stocks. >> is it just a foregone conclusion that if you were an investor, you will see this volatility? >> undoubtedly. we got ahead of ourselves and things are evolving. time shift from some things like twitter to messaging apps like what's app. that's a good thing for facebook. you doing any buying this week? >> i buy and hold and i have been holding the names in the sectors and we will continue to. names like facebook that are leading and growing. twitter's problem and wall street didn't call them out on that. they didn't talk about engagement and timeline views that they were talking about in earlier releases. obviously the numbers are not good. the engagement numbers at linkedin and facebook and others continue to climb. that's where i think the smart money is. >> is that holding you back or do you own a stake on twitter.
they are seeing that facebook is more successful in monitization and twitter. >> i am simple. i focus on engagement and twitter has been struggling for a long time. i love twitter and i use it every day. i think it's a great service. they haven't -- they remain even though they are at 300 million, it doesn't look like they are on the track to a billion which is what everybody thought they would be. do you think he needs to go? >> here tried product revisions that haven't worked. at the end of the day, what they need to do is improve the product and the on boarding. the vast majority of people who come to twitter for the first time never come a second time. the experience is not great. that's what -- the people are not spending more time because they are not improving fast enough. at the end of the day, the dollars follow time spent and that is not growing on twitter.
>> thank you very much. we appreciate your time. moving on to tesla, making a bet on batteries and that company is launch ag i new line for homes, businesses and utilities. phil has more. hi, phil. >> a lot of people asking what exactly are they doing here? is this about helping tesla or the gigafactory out or trying to help solar city. they are trying to build out the ecosystem when it comes to electric batteries and the gigafactory is central to all of this. the tesla energy company that they announced last night is a subbrand. it's a battery system. home, business and even a utility system can buy a battery pack. they are taking orders and deliveries will start in about three or four months. why he believes there is demand for this product right now. the issue with existing batteries is that they suck.
they are horrible. they look like that. there is for seven kilowatt hours. then the question of cost to the inverster and installation. a few details in a bit. will they buy into the program? they look at shares of tesla and people are saying this is the holy grail they have come across. that $3500 that they are talking about for the ten kilowatt hour battery pack you have to according to solar city to buy a prepaid $5,000 contract or you can buy the inverter and do the installation yourself for $7100.
it's not a platt $3500. there additional costs and again, people are going to start crunching the numbers and you will get a sense of whether or not this is one of the deals that is too good to pass up. >> you have to factor in tax credits as the whole thing. >> tesla said they will begin with the options to sell back the cars in three years. >> right. we knew this was coming. some say you have a four-year, $50,000 warranty on this vehicle. you are still buying a preowned vehicle. it is a preowned vehicle and part of what people have been expecting. tesla will take the vehicles that they have come off lease and sell them on a secondary market. >> thank you.
let's talk about solar stocks in the back of the tesla battery news. the solar analyst market good to have you with us. how should we start thinking about this. does this give an edge to solar city. they had a similar price range and the inverter and the software, the keys to the real applications for the systems. seeing how the batteries get implemented and used is how the valley gets created. >> if i'm an investor for solar which is the closest direct competitor for solar city i shouldn't be worried solar city will havage edge because of this program. >> there is a company that produced a battery system that is more flexible and modular that is easier to use than from what we are seeing from tesla. when they talked about other battery systems sucking, he is
wrong. they are more effective. there is a big market on the car market for tesla. >> we chat and your topic has been the maker of inverters. that hasn't worked out very well. the ipo with solar winds, are they losing out at all and is there an investor competition? >> there is a sentiment issue and we will find out a lot when they report numbers. solar edge is picking up shares which is one of the ku69 mers that is a big market and so much growth. there is so much cost structure over 12 or 18 months. they are really going to be a play that is not getting appreciated. >> last quick question. sun power reported solid earnings and reported costs involved because of the yield. stocks are trading off today. are either of them buys?
>> absolutely. we have a buy on sun power and a hold on first solar right now. the real issue is that we don't have the issues with the structure and what the cash flow is. i think both of these names will work from here. there is a lot of value to get released from this and i think it's going to migrate back to the parent companies. >> northland securities. biotech is making a come back. after slipping into the territory yesterday, let's bring in cory davis. great to have you with us. >> thanks for having me. >> there were a lot of generalists and people who didn't necessarily specialize in the biotech sector and entering it through the etfs that have been with you lately. i'm curious if you think that perhaps it's a flush out of the etfs that are moving the stocks as opposed to vice-versa. >> that's a great point. biotech has been on a great run over the last two years. they have been up 100% compared
to the s&p up only 30%. it wasn't surprising that they saw a pull back especially after two of the bell weathers biogen and e lex yon. gilliad's massive beaten raise put a floor on this space. i don't see a massive rotation out of this sector. fundamentals look good and i think it's going to continue from here. >> takinging a look at the earnings it was impressive when you look at the complex specifically. it really just blew past expectations on the street. is that where you see value? a lot of people are taking a look at this and saying i see a pull back. a sect or that i missed out on. which names should i look at? >> so what i'm seeing is that any time one of the stocks breaks, they are taking a really hard look. it's hard to find stuff. they have run so fast. a lot at 52-week highs and normally when something breaks no one wants to touch it. i am finding the opposite that i
cover. it broke the other day and now everybody is taking a look and seeing whether it's time to get into names like that. >> you like valiant? >> that would be the top overall pick. it's not a biotech stock, but more of a specialty farm. the most under estimated and most misunderstood stock in the sector right now. these guys put up a great quarter. they raised guidance and 2016 looks to be a year of earnings and still under appreciated and just closed an acquisition and gives the first billion drug and have an approval coming up that give them a billion opportunity. >> leave it there. have a great weekend. >> cory davis. we are just getting started on this friday. two hedge fund managers making big bets on chicken, pizza and tacos. more on that in a moment and what's driving all theo sales. joining us live and the countdown to fight night is on.
may weather and paquiao ready to rumble and the bets are getting bigger. the man who runs the sports book in las vegas when power lunch returns. blap ap financial noise financial noise bring us your aching and sleep deprived. bring us those who want to feel well rested. aleve pm. the only one to combine a sleep aid... plus the 12 hour pain relieving strength of aleve.
disclosing this morning having entered the stock arguing that the owner of kfc, pizza hut and taco bell was in the early stages of a turn around. signs of strength appeared and the growth opportunity in china where the research suggested he is positioned to overcome recent food safety concerns and could be huge in the coming years. there is room for improvement he notes and at the same time we learned that meister, kor vex capital's founder has been a very major holder. the details of his thesis are not yet clear although probably he is feeling good about the china prospects too. we will find out more in the conference which i will be covering can and we will be there live. and he know that is a turn around is under way. >> absolutely and the language is windage lobe.
he said we think this is a great opportunity and the company is undervalued. he is talking about the poultry food safety concerns. he said they think it's as safe or safer. it's clear he is preserving the options. the ceo is off to a good start. absolutely. if the trim frame is in what he would like to see in terms of operational changes and pizza hut which he thinks needs to do better on efficiency he may go more active. >> hooey is not afraid. he has taken on big targets. >>. >> the culture of an electronics company. that was tough. he didn't really succeed.
he is unafraid to take on targets. that's a compelling thing about him. he is willing to fail. ken griffin would say the same about growing a business and being a true enterprise. not just on the investing side, but that keeps it interesting. >> time now for street talk. the recommendations on the stocks you need to know about. >> because of the low gas prices as well as oversupplied met goal. # >> downgraded to market performance research. analysts are concerned that the pressure on net customer additions will concern until there is progress and downgraded to neutral and the earnings and
the target has been cut to $30. big cut there, melissa. >> they are saying that they were taken down because of execution issues. it could take a while. sky works solution. keep in mind this is an apple play. they had a beat and raised quarter. they had tough expectations on gross margins. 55% and 52%. pacific crest is sticking with the rating and $110 price target on this. >> western union. upgraded to outperform at wells fargo. shares are upgraded based on the price and a solid first quarter. >> and our final stock here ultra petroleum bringing this to a perform to the ultra beating. they guided up 2015 volumes. higher debt keeps them cautious and they do see that in the second half of the year. >> we have a lot more power lunch ahead. the latest read from the car lot. could there be pain coming your
a quick check on the markets and more than 90 minutes left on the trait trading week. they have both the nasdaq and the s&p. higher by more than a half%. that was a real weak spot. down $9 or .75%. >> we profile people with really cool jobs. you will meet a man who builds treehouses for celebrities. >> i get paid to be a treehouse architect. i went to italy to visit stick
and trudy, his wife. they asked me to do a treehouse is in tuscany and they have maybe 1,000 acres there. i walked everywhere and i discovered this lake that they have. there was this gorgeous oak tree. i wanted to create an okt gon around a single tree. i wanted to be a place for sting to play guitar or the family could have lunch or dinner and it kind of just blossomed out of that. it was for donna kairn and she introduced me to julian moore and julian introduced me in val kilmer. i found this one spot on the cliff. i found a barn that it was basically collapsing. my crew went over and a tem belled the barn and we reconstructioned it.
>> definitely just living and working in nature. i am always in the woods. i am always 30 feet off the ground. what a cool life. looked like willie nelson. romero uses only salvaged and reclaimed wood for his designs. to find out what he wants to build next i thought that was really cool. crude oil as the final trades crossed for the week. live at nymex setting us up for the close. >> everyone thought we were going to make a run for 60 and didn't quite happen but even though prices are lower, we are still staying in that range. what to expect for oil next week. i have got all of that when power lunch comes back. blap good. very good. you see something moving off the shelves and your first thought is to investigate the company.
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equal equally. there will be justice for mr. gray. there will be justice for his family and there will be justice for the people of baltimore. >> as i mentioned, gray died a week after a spinal cord injury. an investigation found his death to be a homicide and his arrest illegal. apple is acknowledging problems with the watch for some owners with tattoos. the company posted a statement on the apple watch support page saying permanent or temporary changes to your skin such as tattoos could impact the heart rate sensor performance. other watches have the same issues. fort expanding the recall due to faulty door latches. more than a half million of fiestas and fusions have been recalled. the cars were made between 2012 and 2014. they will replace them at no cost to the customer. down to the wire at churchill downs. american pharaoh is the 5-2 favorite into tomorrow's kentucky derby known as the most
exciting two minutes in sports. the first leg of the triple crown that no horse won since affirmed in 1978. we will see, ty. back to you. >> we got the most exciting two minutes in oil trades coming up right now. >> excellent. >> let's go to jackie at the nymex. >> good afternoon, tyler. it is the most exciting part of everybody's day. oil is about to close here. we are down on the session trading around the $59 level. we saw a bounce yesterday at the end of the month. traders not surprised to see profit taking today. dollar is stronger today and probably part of the reason that we are seeing negative selling pressure as well. we did get the declines from baker hughes and a decline of 24 oil rigs and that was supportive and took us off of the lows of the days. 21 straight weeks of declines and remember the decline rate is slowing somewhat. one-week change up more than 3% and it was a fantastic month up almost 20% for the month of
april as well. we will probably make a run for 60 here soon. >> stocks at session highs. the nasdaq as 5,000 on the button as you see it at 5,000 and up about 60 points. up about 85 getting back what was lost at 18,27. better than 1% and the russell is up about 2/3 of 1%. we welcome back mandy drury with trading nation. >> no rest for the wicked. shares are lower today, but the giant did beat earnings estimates this morning. this after exxon, shell, and bp beat this their reports as well. is this the case of two low expectations or does it point to more upside for energy stocks. let's bring in the trading nation for answers. david seaburg is at cowen and dave, what did you take away from the earnings reports?
>> i mean it's definitely a function of cost savings, but it's also street numbers came down so aggressively. the stocks got crush and numbers followed them down. the bar was definitely completely reset from that front. a lot of higher quality names and the majors as demand picks up and the price of oil moves higher. in the near term we could be seeing a little bit of a pause just given the action we saw yesterday. i say that only because you look at the heavy and shorted names, we notice that at the desk. the shorted names what were up the most yesterday outperformed the rest of the space. we saw the dollar weakened and oil obviously take off. there was a massive risk off trade going on. the hedge funds that were short in the space. mainly in a lot of these offshore names.
you look at the rigs of the world and all those names outperformed because of a risk off scenario. near term we hit a level where we may pause, but long-term we go higher. >> it refreshes. do you agree? >> you were talking about something moving much more than it had been. crude was moving almost 2% a day compared to 1% a day. now you have taken crude and gotten it to be much more range-bound. that crude is expected to be more range-bound over six months. now that you have stability here the earnings expectation and the multiples all start to catch up here. one thing that david mentioned is that these are likely to pause. i would agree that the options market is suggesting something similar. volatility has been lowered, meaning the risk priced into these is decreasing meaning to both the down and the upside.
they are suppressing. we are not expected to see the size of moves that we have seen historically. i wouldn't say it is bullish or bearish. we are range-bound for the next couple of months here. >> thank you very much to both of you for your thoughts. for more trading nation you can head to the website. trading nation.cnbc.com. health care is the worst performing in the month of april. a sea lion wanders the streets of san francisco. more of this can't miss video when power lunch returns.
the nasdaq is up by 56 points. a little bit more than 1%. higher by 6/10 of 1%. they sinus on strong earnings. ty? >> melissa, check this out. a sea lion wandering the streets of san francisco. call in karl mald in. his name is rubbish and he was strolling around the city by the bay. he was caught and taken to a local marine mammal center. the marine experts are taking care of rubbish and are trying to get rubbish back to the ocean. melissa? >> so cute. tar are health care the worst performing sector and it's may now, so is this a buying opportunity or should you stay away? the former pharmaceutical analyst. great to see you. >> great to see you, melissa.
>> it's hard to take a look at this, but you are taking a look at large cap and noting something unusual is going on in relationship to the s&p 500. >> isi and his group did interesting work. and they only had that lower relative to the market one other time in the last ten years. i think what that said is that the fundamental performance of the industry has driven the performance from shareholder values that has been driven by innovation and m&a. >> certainly. >> let's take a look at the picks at this point. you like two members of what is a love triangle. teacha is not on your list.
walk me through the reasoning and what you think will unfold. >> i certainly when i listened to your show when you talked about the love triangle i don't disagree with the view that you can own any one of the three. i would focus on them and the reason would be that i think something will happen with those two companies. i think you have very strong fundamentals and exceptional management teams at both companies. i prefer to own those two rather than all three. >> it's not a vote against owning teacha so to speak. >> which of the big companies do you think are the most exciting pipeline. >> i think from a stock market perspective, you have to like merck here. this company struggled for sometime and think ken frazier had the courage of his condominiums to continue to pursue the r&d path that brought
the company this far and what we saw in the first quarter recently is they blew away the numbers and it's being driven by new products which are being introduced into the market and significantly higher gross margins and the valuation lagged at the sector. i think that's a stock that i would focus on and i think pfizer too the pipeline is improving. that's a theme for the whole sector, but certainly for merck and pfizer. i think that pfizer also is very likely to split into several business units over the course of the next 18 months separating the innovative core from the established products and that could drive further value for shareholders. >> thank you as always for being with us. >> thanks for having me. all new season of the profit returns may 12th. this one also gives you the chance to help make the american dream come true. if you are on twitter, it's
share the profit. for every retweet or share it gets, they are going to donate $1 to help small businesses across america. show support and share the profit. auto stales members for april have been coming in all day. how is that fort f150 selling? we will bring you the details and a huge sports weekend. maybe one of the biggest ever. how much money is going to be a bet on these various events from the nba play outs to the play weather paquiao flight. they are playing this song. stand by me in honor of benny king who died yesterday at the age of 76. we'll be right back. blap take a deeeeep breath in. . . and . . . exhale. . . aflac! and a gentle wavelike motion...
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from yesterday's average. a full 20 cents higher than it was a month ago. melissa? >> fort and gm after respecting sales figures for the month of april. now with the details. we are waiting for the final calculations and if you look at big four largest automakers in the u.s. the biggie three plus toyota. they reported positive sales numbers. gm stands up because it was well above the edmunds estimate. toyota was well below what they were expecting. overall the expectation is that we will see a 15e8s rate of about $16.8 million. it continues to be the story that trucks are rolling. the demand continues to grow and gm's cross over sales last month, best ever. not just for best april ever but best month ever.
pick up demand is strong. when you take a look at shares of toit a keep in mind that all of the automakers are benefiting from what is well below. we will get the numbers next friday, but this is the story we talked about for sometime. strong demand in the market and not only on the replacement side, but people are looking out and saying i want more space when i buy something. >> i am curious with the rising rates, what will it do to the sector. that relied on financing for a lot of these sales. >> i am not sure it will have an impact. the expectation is that we see this for the next three or four months. >> when we looked at the earnings with the f150 it's interesting to see the sales figures and see demand for the trucks.
>> remember part of that is the production issue. they are just now getting that plant up and running. now that they should have a better supply moving into show rooms, that should be mitigated in the second half of the year. the back half is loaded for ford. that's really the story when it comes to ford. welcome back. you can hear what phil just said. how's business? >> business is very solid. it's good. our experience is consistent. not quite as strong in april as march, but there was a lot of push by the manufacturers in a month like march and again in june. the market is consistent and good. >> are you seeing -- you are well-represented in texas and the gulf coast which are two
areas more impacted than others by falling oil prices. have you seen any effects there? i have seen it in markets and where we don't have dealerships. i have seen some. houston sales didn't grow and they are quick for the industry but our sales on that basis was up 10%. >> how about that f150? what's the demand like and what are you hearing? >> we are big with fort. fort is 10% of the business and our stores tend to be in texas and big truck stores. the consumer demand for the truck is very high. it's a very complex situation when you sell down the old model. we don't have all of the build combinations and they want loaded trucks and they want
platinum. on the older truck, some of the combinations come in faster than we like. the fort sales are going to be strong. >> overall what is the mix of sales like and what is between suvs and trucks and cars and what is the mix of sales versus leasing? >> starting with the truck and car mix, it's a driven market truck and suv and cross over. our company is about 53% on the truck side which is probably lower than the industry because we are a big toyota company as well. they are not so truck-driven. you look at brands like jeep and gmc, they were up 20% in april. it's a truck-driven market. leasing is strong but leasing is more skewed towards luxury brands and also certain geographies in the u.s. and the northeast and california. it's not so big in texas. the lease business is strong
too. >> interesting. earl, thank you very much. group one autos ceo. melissa? >> it has been a rough year for the casino stocks. can one stocks. we'll talk to head of one of vegas's biggest sports books. that's ahead. hey, melissa, you are looking at the stage, they're getting everything ready for the weigh-in later this afternoon. who is winning the battle the boxing match over sponsorship? in some new names. we'll have that when we come back.
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take a look at stocks right now. pretty close to session highs. the dow is higher by almost 1% at this point. the s&p 500 higher by 20 points. the nasdaq composite up by 1.1%. driving that move shares of apple up more than 2% and semiconductors very, very strong in today's session. millions of dollars will be earned and spent on tomorrow's big mayweather/pacquiao fight. jane wells is live in las vegas. >> reporter: above all the money being spent on this fight, there's also being a record set on the amount spent on sponsorships, topping 13 million. pacquiao is packing in most of them. he has pistachios butter finger
cups and samsung providing these behind the scene images. pacquiao prize money will be less than mayweather's but he's still guaranteed 80 million much of which he plans to give away. >> my concern, my thinking is you know giving people the fans, this is what they want. the fans are waiting since five years ago, six years ago to make this fight happen. >> how much money do you make on this fight? >> a lot. >> do you need to work anymore after this? >> i don't have to work now, so it's okay. >> floyd "money" mayweather almost has no sponsors. we asked her promoter leonard ellerbe how come? >> i've received a number of offers from a variety of different sponsors, we just decided that that didn't meet floyd's needs. floyd is a very astute
businessman. he's made some very very good financial decisions as it relates to his career. >> meantime mayweather merchandise flying off the shelves, shirts for $70, hats for $88. he has a guaranteed payday of at least $120 million. making him in one day the highest paid athlete in a single year. who needs sponsors in that case? by the way, guys if you want to see the fight for free, head for the border. it is airing for free in mexico. >> fascinating. jane, thank you very much. we'll watch the weigh-in later. eric you did number crunching and mayweather is set to make more money in this fight than a lot of companies have made over the past year. >> yes. so what was the biggest ipo so far this year? shake shack. if you look at their revenues they don't even make as much in an entire year as mayweather will make tomorrow night.
mayweather at $120 million is ahead of shake shack's $119 million, that they make in all 65 locations. these are big-name companies. that's how much they make in revenues. if you look at their revenue number and figure out what's the expected market cap of a company that makes around 120 million, it's over $300 million. if mayweather was a company, he'd be a $300 million company. if you really dig into let's say profitability, because we know he doesn't save all his money. he blows a lot of it on all kinds of expenses. if he actually profited $120 million a year that would be more than gopro, buffalo wild wirng wings? >> are those their profits. >> net income. >> if he didn't have to pay taxes, coaches, this is what we're looking at. this is a massive number for one
night. >> it brings it home. all that sports action is big, of course, for the las vegas casinos. a lot of money will be wagered on those events especially the fight. joining us now is johnny avello. he's a manager at the wynn. we have so many different things this weekend. i guess it's the fight but it could be the derby. >> the fight is going to surpass the derby by probably ten times. but the derby will take place in the early afternoon, good warmup and then the fight will be about four and a half hours later. we've already taken as much money on the fight as we're going to take on the derby which is very unusual. usually when you open up a fight price, you know you take your bets and it stays stagnant for quite a while. this one attracted a lot of money each and every day for the
last two months. >> we haven't had a big headline fight like this one in a long long time. we're quote something of the odds you have there on pacquiao and mayweather. for people who are not aware of how you'll calculate the odds it looks there like the money has been moving to mayweather. am i reading those numbers right? what do they mean? >> the opening line was mayweather minus 250. that what that means for betting purposes, everything is equivalent to $100. put up $2.50 to win 100. it has dropped down to minus two, which is put up two to win one. it looks like it's all pacquiao money. but it was pacquiao money early, now it's been mayweather money up to this point. we have a whole day to go yet. >> if i put up $200 and mayweather wins i get an extra $100 back in addition to the
$200 i put up. for $275 coming back into my pocket. you said the money lately has been moving into which fighter? >> more on the mayweather side. we were as low as 185, which is the 185 to win 100 on mayweather. now we've moved up the line. >> there's arguments for both sides. six-figure bets are very common on this fight. so therefore, you'll see more movement in the line could go back to the pacquiao side. >> is this the biggest money fight ever for you all? >> it is. i've been in the sports book business for almost 30 years. and i've seen some pretty big fights in town. usually a big fight will handle somewhere between 20 million to 30 million. this one will double any fight we've done in the past. so that just shows you the magnitude of the cash coming in. >> that is really something.
johnny, a big day in vegas tomorrow. good luck with all of it. we appreciate you being with us. >> thank you much. tonight on "fast money," the good, bad and ugly for the week in the markets. i'll be at e-merge america 2015 in miami. thank you for watching. the "closing bell" starts now. hi everybody. welcome to the "closing bell" on this first trading day of the month, i'm kelly evans at the new york stock exchange. >> what happened to sell in may? they sold yesterday and we're back again. the do iw is up 166 points which is almost as good as manny pacquiao's numbers. i learned something about that in vegas. also powering your home with a tesla battery. ceo elon musk made that big announcement last night in los